StockWatch (May 17-21, 2010): PSEi, RFM, EEI

(Chart: Daily Resistance: 3342 Support: 3073)

The index reacted positively with the good turn out of the election. The index jumped from the lowest level last week to 3260 on the first trading day. However, again, the resistance line from June 2008 still seems to be a hindrance to the upward movement. Also, there seems to be no follow-through on the trading except last Thursday, but that was not sustained as trading last Friday was lesser.

For next week, expect a downward to sideways movement. Do observe the resistance line from June 2008 if the index is able to move further beyond that line.

Notice also that the MACD and RSI seems to be moving lower, while the index seems to be still moving higher, but a bit slower. If the MACD and RSI records a lower high in the following days, while registering a new index high, this may be signs of a bearish divergence and a signal to start going light.

RFM (Chart: Daily Resistance: 1.04-1.66 Support: 0.95)

Looks like RFM is on the come back, with a rounding bottom formation that broke out last Friday with large volume. Target price for the breakout is around 1.66. The only problem with the breakout is that it will have to negotiate a tough upward movement as the resistance from 1.04 to 1.66 is the large gap down that happened last Sep 2008. Also looking at the span of the rounding bottom which is nearly 1 ½ year, this gives us an idea that target price would take longer to be achieved. But for those going long, this would be a candidate where you could park your funds.

EEI (Chart: Daily Resistance: 3.75 Support: 3.34)

EEI seems to have broken out of a symmetrical triangle, with a target price of 4.0. Only resistance is 3.75, which is a previous high from 2008.

StockWatch (Jan 11-15, 2010): PSEi, EEI, ALI, CYBR, AT

PSEi (Chart: Daily Resistance: 3077/3130 Support: 3015/2979)

First happy new year to all of you! This is my first post for the year 2010.

I was actually hoping for a stock market blast on Dec due to window dressing, but the market action last Dec was not as expected. As of current the index is still moving sideways, and previously every sideways movement comes with a short rally that would bring the index higher. That is something to watch out this time because the index moved lower last Dec and hasn’t been able to move higher than 3130, the previous high from Dec 2. If the index is able to move higher than the previous high, then good for the index, because it means there is still some steam left, but if it is unable to move beyond the previous high, we better lessen our positions as this could indicate the start of the market’s descent.

The market in general is still bullish as indicated by the RSI always pulling up when it reaches the 50 level. But for how long the index could sustain this is left unanswered.

Also another thing to watch out is the MACD crossing below the center line. As of current the MACD is still safely above the center line, with the MACD opening upward so we can probably expect further upward movement by next week. Again, since the index has been moving sideways, trading strategy would be to range trade and as much as possible avoid going long.

EEI (Chart: Daily Resistance: 2.80 Support: 2.40)

EEI had a large volume and large spread on Wed and Thursday last week. I could not see any formation, at the very least, it could have broken out of a sideways channel with a target price of above 3.0. Currently the stock has already reached 2.80, so it is not a good idea to buy at the current level. This stock had a correction on the last trading day last week, and the good news is there was not much volume on the downward movement. So this means a lot are still hoping for this stock to move higher. Try to wait for the stock to move lower near 2.50 to 2.60 level before buying. Also watch out for the volume of the downward movement. Larger volume on the downward movement means you should avoid this stock.

ALI (Chart: Daily Resistance: 12.75 Support: 10.50)

Watchout for ALI as the MACD tries to cross above the signal line and the center line as well. Trading last Friday was accompanied with a considerable large volume. The 65 day moving average is currently blocking the upward movement, but I think this will easily be surpassed by this stock. Again keep watch of the volume for signs of weakness.

Other stocks:

AT and CYBR seems to be moving with volume. CYBR is currently overbought but this can still move towards 0.75, which is a previous high. AT also had large volume last week and it can still move higher, only problem is that it is already overbought. On both stocks, you can probably wait for a return move before buying.

In Retrospect: EEI, CMT

EEI

EEI took a breather for this week and traded between 3.25 and 3.60. There was only 1 day when the stock was sold down and on the rest of the days, the stock was bought up. This just indicates that a lot are still bullish with this stock. With such a momentum moving upward, I am somehow expecting for stock to form a pennant or flag formation. The price action last Friday saw the stock move from 3.35 to a high of 3.60 which suggests a breakout from a flag formation. However, the volume in my opinion is just average, relative to the volume of the previous days which is not very much a good breakout volume. If the stock proceeds to move higher for next week without a good volume of above 5M shares traded, this means the stock may be nearing its exhaustion level. Watch out for the price level of 3.80 to 4.00, the stock may find it hard to move past that level if the volume is still thin on its upward moves.


CMT

CMT also took a breather for last week and traded between 0.91 and 1.02. The sideward movement is perfect for a flag formation. A breakout is still to be seen so watch out for this. A good break out volume would be around 10M shares traded

StockWatch (Feb 11-15, 2008): PSEi, EEI, CMT

PSEi (Chart: Daily Resistance: 3330 Support: 3190/3120)

The resistance line at 3330 held last week, preventing the advance of the index. Nothing much happening on the index, probable trading action for next week will still be sideways to downward movement. It may however trade within a small triangle bounded by the resistance line and the long standing support line from 2006. We are still in bearish territory for the MACD so trading strategy would still be keeping short positions.

EEI (Chart: Daily Resistance: 3.55 Support: 3.00/2.80 )

The long wait had paid off for EEI, the stock bounced from its low of 2.34 reaching a high of 3.55. The stock is very bullish that it consecutively closed higher for the whole week and accompanied by large volume. Looking at the chart, it has just recently broken a resistance line formed from its recent downward move. The resistance line was broken with volume, so this definitely suggests that this stock is now out of the downward move. However, last Friday’s trading is suggesting that the recent bullish move for this stock is now encountering some resistance. The stock definitely has the potential of moving towards near 4.50 level, but it needs to take a breather from the bullish move. So expect the stock to probably move sideways to downward, trading between 3.55 and 3.00. Watchout for the volume on the downward move, low volume on the downward move is good for this stock, but increased volume on the downward move means that a lot are starting to dump this stock. If you had this at the low of 2.34, it would be best to sell a portion of the stock and buy back near 3.00.

CMT (Chart: Daily Resistance: 1.02/1.12 Support: 0.84)

CMT had a bullish run last week, similar to EEI. It consecutively closed higher with volume and on the last trading day, it gapped up with large volume. An area pattern of a falling wedge seems to have formed and the stock has broken resistance at 0.86. This stock has an upside TP of 1.45. Resistance levels along the way up are the Fibonacci retracement levels of 1.02 (50%) and 1.12 (61.8%). Buying at 0.99 is still ok and with-in the 1:3 risk to reward ratio. However, RSI is indicating that this stock is near overbought so it is still possible for this stock to move downwards re-testing support at 0.84. Again watch out for downward movement with large volume as this may indicate that traders are now dumping the stock. MACD for this stock is still below the zero line, so trading strategy for this stock is to hold for the short term only.

In Retrospect: EEI, TEL

EEI

EEI continued to move sideways for the past week. However there seems to be a small light of hope last Friday with the stock gaining around 3% and volume of around 4.8M shares traded. If the stock is able to gap up with more than 4M shares traded, this is a sign of strength for the stock and a formation of an island reversal.

TEL

TEL was able to significantly create another gap up on the second day of trading last week and as expected, resistance at 2900-3000 level was encountered. There will probably be profit taking for the coming week. If the support at 2905 holds for next week, then the stock might be good for another climb probably towards 3200 level.

StockWatch (Jan 28-Feb 01, 2008): PSEi, EEI, TEL

PSEi Weekly Chart
PSEi (Chart: Daily Resistance: 3330 Support: 2980)

The index has reached the downward TP of the channel from where it broke down. Currently an island reversal has been formed confirming the action for the past 3 trading days. The island reversal is an indication that the index is now on its way to retrace the previous action, however, this is not a guarantee that we will be out of the downward moving action. We still have a couple of resistances on the way up, one of which is the support-turned-resistance line at around 3330. Also, we have been successively gapping up for the past 3 days, forming a break away gap and a run away gap. We have yet to see an exhaustion gap, so we may see cautious trading towards the end of next week. . Looking at the MACD for the daily and weekly chart, we can see that we are still in bearish territory despite the 3 successive up days, so the appropriate strategy would be just to take short positions until probably all notable resistances are taken out.

EEI (Chart : Daily Resistance: 2.50 Support: 2.36)

EEI looks promising as volume for the past 2 days has been exceptionally large and has the potential of retracing its previous downward move. It has currently established support at around 2.36 and has been trading sideways. However, this stock hasn’t been responding positively with the recent 3 day upward move by the index. So buying at this time is too much of a risk. A good buy signal is probably when the stock gaps up with volume of around 3M.

TEL (Chart: Daily Resistance: 2900/3000 Support: 2740)

TEL has already reached its downward TP and has surpassed it. Currently, the trading last Friday has created an island reversal, a confirmation that the recent downward move has ended. Upcoming resistances are previous highs of 2900 and 3000.